INVESTMENT SECURITIES

Investment securities classified as current and long-term were as follows at December 31, 2014 and 2013, respectively:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in millions)
December 31, 2014
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations	$	365	$	10	$	(1	)	$	374
Mortgage-backed securities	1,453		50		(5		)	1,498
Tax-exempt municipal securities	2,931		140		(3		)	3,068
Mortgage-backed securities:
Residential	17		—		—			17
Commercial	846		16		(19		)	843
Asset-backed securities	28		1		—			29
Corporate debt securities	3,432		299		(13		)	3,718
Total debt securities	$	9,072	$	516	$	(41	)	$	9,547
December 31, 2013
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations	$	584	$	6	$	(6	)	$	584
Mortgage-backed securities	1,834		34		(48		)	1,820
Tax-exempt municipal securities	2,911		93		(33		)	2,971
Mortgage-backed securities:
Residential	22		—		—			22
Commercial	662		20		(9		)	673
Asset-backed securities	63		1		(1		)	63
Corporate debt securities	3,474		223		(30		)	3,667
Total debt securities	$	9,550	$	377	$	(127	)	$	9,800

Gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows at December 31, 2014 and 2013, respectively:



	Less than 12 months					12 months or more					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
	(in millions)
December 31, 2014
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations	$	79	$	—		$	80	$	(1	)	$	159	$	(1	)
Mortgage-backed securities	22		—			320		(5		)	342		(5		)
Tax-exempt municipal securities	131		(1		)	118		(2		)	249		(3		)
Mortgage-backed securities:
Residential	1		—			4		—			5		—
Commercial	31		(1		)	267		(18		)	298		(19		)
Asset-backed securities	13		—			—		—			13		—
Corporate debt securities	219		(6		)	128		(7		)	347		(13		)
Total debt securities	$	496	$	(8	)	$	917	$	(33	)	$	1,413	$	(41	)
December 31, 2013
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations	$	231	$	(6	)	$	5	$	—		$	236	$	(6	)
Mortgage-backed securities	1,076		(47		)	21		(1		)	1,097		(48		)
Tax-exempt municipal securities	693		(28		)	57		(5		)	750		(33		)
Mortgage-backed securities:
Residential	6		—			1		—			7		—
Commercial	270		(8		)	40		(1		)	310		(9		)
Asset-backed securities	35		(1		)	—		—			35		(1		)
Corporate debt securities	594		(28		)	17		(2		)	611		(30		)
Total debt securities	$	2,905	$	(118	)	$	141	$	(9	)	$	3,046	$	(127	)

Approximately 96% of our debt securities were investment-grade quality, with a weighted average credit rating of AA- by S&P at December 31, 2014. Most of the debt securities that were below investment-grade were rated BB, the higher end of the below investment-grade rating scale. At December 31, 2014, 7% of our tax-exempt municipal securities were pre-refunded, generally with U.S. government and agency securities. Tax-exempt municipal securities that were not pre-refunded were diversified among general obligation bonds of U.S. states and local municipalities as well as special revenue bonds. General obligation bonds, which are backed by the taxing power and full faith of the issuer, accounted for 36% of the tax-exempt municipals that were not pre-refunded in the portfolio. Special revenue bonds, issued by a municipality to finance a specific public works project such as utilities, water and sewer, transportation, or education, and supported by the revenues of that project, accounted for the remaining 64% of these municipals. Our general obligation bonds are diversified across the United States with no individual state exceeding 11%. In addition, 16% of our tax-exempt securities were insured by bond insurers and had an equivalent weighted average S&P credit rating of AA exclusive of the bond insurers’ guarantee. Our investment policy limits investments in a single issuer and requires diversification among various asset types.

The recoverability of our non-agency residential and commercial mortgage-backed securities is supported by factors such as seniority, underlying collateral characteristics and credit enhancements. These residential and commercial mortgage-backed securities at December 31, 2014 primarily were composed of senior tranches having high credit support, with over 99% of the collateral consisting of prime loans. The weighted average credit rating of all commercial mortgage-backed securities was AA+ at December 31, 2014.

The percentage of corporate securities associated with the financial services industry was 21% at December 31, 2014 and 23% at December 31, 2013.

All issuers of securities we own that were trading at an unrealized loss at December 31, 2014 remain current on all contractual payments. After taking into account these and other factors previously described, we believe these unrealized losses primarily were caused by an increase in market interest rates in the current markets than when the securities were purchased. At December 31, 2014, we did not intend to sell the securities with an unrealized loss position in accumulated other comprehensive income, and it is not likely that we will be required to sell these securities before recovery of their amortized cost basis. As a result, we believe that the securities with an unrealized loss were not other-than-temporarily impaired at December 31, 2014.

The detail of realized gains (losses) related to investment securities and included within investment income was as follows for the years ended December 31, 2014, 2013, and 2012:



	2014			2013			2012
	(in millions)
Gross realized gains	$	29		$	33		$	38
Gross realized losses	(9		)	(11		)	(5		)
Net realized capital gains	$	20		$	22		$	33

There were no material other-than-temporary impairments in 2014, 2013, or 2012.

The contractual maturities of debt securities available for sale at December 31, 2014, regardless of their balance sheet classification, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



	Amortized Cost		Fair Value
	(in millions)
Due within one year	$	530	$	534
Due after one year through five years	2,060		2,164
Due after five years through ten years	2,036		2,145
Due after ten years	2,102		2,317
Mortgage and asset-backed securities	2,344		2,387
Total debt securities	$	9,072	$	9,547